Instructions For Form 706-A - United States Additional Estate Tax Return printable pdf download

Instructions for Form 706-A

Department of the Treasury

Internal Revenue Service

(Rev. September 2016)

United States Additional Estate Tax Return

( For use with Form 706-A (Rev September 2013))

To report dispositions or cessations of qualified use under section 2032A of the Internal Revenue Code

and write “Form 706-A” and the qualified

derived), whichever is greater, for the

Section references are to the Internal Revenue

Code unless otherwise noted.

heir's social security number on the

preparation of each such return. See

check or money order.

section 6694, T.D. 9436; 2009-3 I.R.B.

268, Notice 2008-11, 2008-3 I.R.B. 279;

If you are making an election to

Future Developments

Notice 2008-13, 2008-3 I.R.B. 282; and

increase basis, see Basis on page 2 for

Notice 2008-46, 2008-18 I.R.B. 868 for

For the latest information about

information on paying interest.

more details.

developments related to Form 706 and

Where To File

its instructions, such as legislation

Definitions

enacted after they were published, go to

File Form 706-A at the following

Specially valued property. The term

address.

“specially valued property” means farm

General Instructions

Department of the Treasury

or closely held business property that

Internal Revenue Service Center

the executor elected to value at actual

Purpose of Form

Cincinnati, OH 45999

use rather than fair market value (FMV)

(defined on page 3). The executor

An heir must use Form 706-A to report

Statute of Limitations

makes the election on Form 706, United

the additional estate tax imposed by

States Estate (and Generation-Skipping

section 2032A(c) for an early disposition

The additional estate tax may be

Transfer) Tax Return, filed for the

of specially valued property or for an

assessed until 3 years after the IRS

decedent. Specially valued property

early cessation of a qualified use of

receives notice that the qualified heir

refers to the qualified real property

specially valued property.

disposed of the specially valued

described in section 2032A and

property or ceased to use it for the

The recapture tax is limited to the tax

includes qualified real property owned

qualified use.

savings attributable to the property

indirectly, such as interests in certain

actually disposed of (or for which

However, if the property was

partnerships, corporations, and trusts as

qualified use ceased) rather than to the

disposed of in an involuntary conversion

described in section 2032A.

tax savings attributable to all the

or in an exchange, the tax may be

If special valuation was elected on

specially valued property received by

assessed up to 3 years after the IRS

Form 706, each qualified heir consented

the heir.

receives notice that the property was

in writing to his or her personal liability

replaced or will not be replaced. See

Who Must File

for the additional estate tax attributable

section 2032A(f) for details.

to his or her interest in the specially

The qualified heir must file Form 706-A

valued property.

Lien

if there was any taxable event (see

Qualified heir. The term “qualified

Taxable Events later) with respect to the

If the estate elected special-use

heir” means, for any property, a member

specially valued property even if no tax

valuation, section 6324B establishes a

of the decedent's family who acquired

is ultimately due. Further, the qualified

special lien against the specially valued

the property (or to whom the property

heir must file Form 706-A if there was

property equal to the adjusted tax

passes) from the decedent. If a qualified

any involuntary conversion or exchange

difference attributable to the special-use

heir disposes of any interest in qualified

of the specially valued property even if

valuation.

real property to any member of his or

the conversion or exchange is

Penalties

her family, that member shall thereafter

nontaxable.

be treated as the qualified heir for the

When To File and Pay

Return preparer. The Small Business

interest.

and Work Opportunity Tax Act of 2007

File Form 706-A and pay any additional

Taxable Events

(Act) extends the application of return

taxes due within 6 months after the

preparer penalties to preparers of estate

The qualified heir causes a taxable

taxable disposition or cessation of the

tax returns. Under section 6694, as

event by disposing of any interest in the

qualified use unless an extension of

amended by the Act, and the transitional

specially valued property or ceasing to

time has been granted.

relief provided by Notice 2007-54,

use the specially valued property for its

Use Form 4768, Application for

2007-27 I.R.B. 12, and the final

qualified use if:

Extension of Time To File a Return

Regulations contain in Treasury

The disposition or cessation of

and/or Pay U.S. Estate (and

Decision 9436; 2009-1 CB 268, estate

qualified use was before the death of

Generation-Skipping Transfer) Taxes, to

tax return preparers, who prepare any

the qualified heir and

apply for an automatic extension of time

return or claim for refund which reflects

The disposition or cessation was

to file. Check the “Form 706-A” box in

an understatement of tax liability due to

within 10 years after the decedent's

Part II of Form 4768.

willful or reckless conduct, are subject

death. (But see Two-Year Grace

Make the check or money order

to a penalty of $5,000 or 75% of the

payable to the “United States Treasury”

income derived (or income to be

Nov 08, 2016

Cat. No. 10142D

Instructions For Form 706-A - United States Additional Estate Tax Return

Related Articles

Related forms

Related Categories